WASHINGTON (Reuters) - Two influential U.S. senators, worried about Takata Corp’s ability to complete its recall of potentially deadly air bag inflators, sought regulatory guidance on how to hold the Japanese company accountable if its U.S. subsidiary goes bankrupt.
“We have concerns about Takata’s financial solvency, which is now at risk ... and that as a result, consumers could be left with defective airbags that no one will be forced to fix,” Democratic Senators Richard Blumenthal and Edward Markey said in a letter to the National Highway Traffic Safety Administration on Monday.
Takata must pay a $70 million cash penalty and could be fined up to $130 million if it fails to keep to the recall schedule. Major customers, including Honda Motor Co, Toyota Motor Corp and Nissan Motor Co, have dropped the company’s air bag inflators, while Takata has slashed its earnings forecast and its shares have fallen sharply.
“These developments raise the concern that these liabilities could overwhelm the company and lead Takata Corporation to bankrupt its U.S. subsidiary,” the senators wrote to NHTSA Administrator Mark Rosekind.
Blumenthal and Markey asked Rosekind how the U.S. government can assure that replacement inflators will be available for U.S. car owners and how costs for the recall and potential penalties would be handled in the event of a bankruptcy.
NHTSA officials were not immediately available for comment.
A week ago, NHTSA announced hefty fines and an accelerated schedule for eliminating Takata air bag inflators that are linked to at least eight deaths from America’s roads. Regulators also ordered the company to phase out use of ammonium nitrate propellant, as part of one of the biggest automotive recalls in U.S. history.
Reporting by David Morgan; Editing by Richard Chang